FIN 351 DeVry Week 2 Quiz Latest

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FIN 351 DeVry Week 2 Quiz Latest


FIN 351 DeVry Week 2 Quiz Latest


FIN 351 DeVry Week 2 Quiz Latest

  1. (TCO 2)The primary purpose of fundamental stock valuation is to _____.
  • eliminate stocks of those companies that are potential losers from the portfolio
  • identify for purchase those companies that are fundamentally undervalued
  • learn to identify peaks and troughs of the business cycle
  • All of the above

Question 2. Question : (TCO 2) Some of the major leading indicators would be _____.

  • money supply (M2), consumer expectations, and stock prices (S&P 500)
  • personal income, employees on nonagricultural payrolls, and industrial production
  • average prime rate charged by banks, labor cost per unit of output, and commercial and industrial loans outstanding
  • All of the above

Question 3. Question : (TCO 2) In which stage of the industry life cycle are companies likely to be privately owned?

  • Development
  • Maturity
  • Decline
  • Expansion

Question 4. Question : (TCO 2) The crossover point on the life cycle curve is the point where _____.

  • the company issues stock in an initial public offering (IPO)
  • the company gets listed on an organized exchange
  • the company’s industry moves from the growth stage to the expansion stage
  • the industry’s products begin to be accepted by the marketplace

Question 5. Question : (TCO 2) Which of the following statements about stock valuation based on asset value is NOT true?

  • Natural resources often give a company value, even if an income stream is not produced.
  • The value of the assets may not even appear on the balance sheet.
  • Current assets are usually excluded from the valuation process, since they will be used up in the next business cycle.
  • Hidden assets can add substantial value to the firm.

Question 6. Question : (TCO 2) The primary difference between dividend valuation models and earnings valuation models is _____.

  • selecting the appropriate discount rate
  • dividends are not considered in earnings models
  • whether the investor’s income stream or the firm’s income stream is measured
  • More than one of the above

Question 7. Question : (TCO 2) P/E ratios are influenced by a company’s _____.

  • growth rate
  • risk
  • capital structure
  • All of the above

Question 8. Question : (TCO 2) The major device for measuring the profitability of a firm over a defined period of time is the _____.

  • income statement
  • balance sheet
  • statement of cash flows
  • None of the above

Question 9. Question : (TCO 2) Asset-utilization ratios measure _____.

  • productivity of fixed assets in terms of sales.
  • the relationship of sales on the income statement to various assets on the balance sheet.
  • the firm’s ability to pay off short-term obligations as they come due.
  • All of the above

Question 10. Question : (TCO 2) _____ ratios measure the impact of external market forces on the internal performance of a firm.

  • Price
  • Profitability
  • Liquidity
  • Asset-utilization